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Sad story, I agree with folks who say you should seek out legal advice.


If you are going to receive funds with PayPal and they are going to exceed the 'occasional sale' guidelines (which some people interpret to mean the same guidelines at the rule for sending an IRS 1099 form which is < $600 annually.

First establish your business presence in the US, that means creating an LLC, getting an EIN [1] and establishing a relationship with a US based bank.

If you get hung up on those steps, don't start taking money with PayPal because their zealous anti-fraud/laundering/drug program fires on a hair trigger. It didn't help that the OP is a student from Venezuela which is not one of America's trading partners.

I expect you will lose most of this money in legal fees. However, if the business is durable, and you manage to establish your LLC (that lawyer you got can help with that) then you will make it back and PayPal will back down. As long as the money trail can be tracked and everyone in the path reports it to the Federal Government so that they are satisfied it isn't part of a laundering scheme[2], or if it was they can catch the folks involved, you will be ok.

[1] http://www.irs.gov/Individuals/International-Taxpayers/Taxpa...

[2] This is how the laundering scheme would work. Some criminal enterprise hires a bunch of third parties to buy your 'widget' for an inflated price, say $10,000 per copy. You sell the 20 copies, get the $200,000, now you go to a coffee shop owned by the criminal enterprise and buy a Double Vente Latte for $180,000 made out of hand picked coffee beans. The crook now has $180,000 of "legitimate" income from his coffee shop, you have $20,000 in "profits" on your amazing Javascript widget, and 20 drug dealers have a bit of software they just delete from their hard drive (if they down loaded it at all). Everybody "wins." So the US Government wants to be able to subpoena your customer list to track the money from the drug dealers to you and then back to the crooks. Paypal helps with that. If you make it hard for them to do that, they keep you money.

'It didn't help that the OP is a student from Venezuela which is not one of America's trading partners.'

A common misconception among Americans. Though understandable considering the state of diplomatic relations.

"The United States is Venezuela's most important trading partner. U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U.S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing, and finance sectors."


Thank you for that, I stand corrected.

>It didn't help that the OP is a student from Venezuela which is not one of America's trading partners.

It very much is. That's one reason for most of the anti-Venezuelan/Chavez propaganda: to get a puppet government like before to cut US companies better deals.

Here's a related question. PayPal is officially in my country. Can I take money from anyone in the world and receive it in under my country's law?

Yes, if PayPal does business in those countries.

There are some countries were you can pay but not receive funds and some where you can sell but can't keep any money in your PayPal account (it's automatically transfered every day to you local bank account).

PayPal wants to do business everywhere it can (that's how they make money) and modifies how it does business to meet the laws it must.

So, it can't do business in countries where the US prohibits it (see the OFAC list) as they're a US company and limits account functions where other laws require it.

You would need to read your country's law books, which may differ depending n whether you are from South Africa, Japan, Romania or anywhere else where you can use Paypal.

Another option might be to force paypal to refund money to your customers, and then once re-established, beg your customers to pay you into your new account. I suspect most will do so willingly.

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